Homeowners-Insurance Probe Gains Steam

4/5/2012 1:33PM

New York's top financial regulator is expanding an investigation of insurers that force homeowners' policies on borrowers after turning up evidence that consumers were charged too much. Liz Rappaport has details on Lunch Break.

This transcript has been automatically generated and may not be 100% accurate.

... I ... the use of all people like to see me when talking about who was overcharged potential I think we were talking about homeowners have missed mortgage payment ... and when this that and therefore probably also missed a payment on their ... regular homeowner insurance okay so when that happens under these insurance companies think ... thats an airforce an insurance policy on to the home and the homeowner ... even though ... I knew a new policy in this new policies are sometimes as much as ten times more expensive ... than the regional ... homeowners policy because they consider them a bigger risk at that point right they consider them a bigger as to how the home ... might be a band and Lauren in foreclosure and ... you know ... that the insurance company that that's potentially bigger payout to an ... end to this to be on top of existing my posse it would be a good brand new coffee in general it to bring in talking in general ... and and the profit you know what the but the regulator is looking at is and whether or not these policies what you know were were were too expensive because what he found ... he's intense and subpoenas in letters requesting a laptop it's already late to started this in the fall ... on this is of York's financial regulator like the present financial services so ... be found and ... they found ... that that in fact the insurers were only paying out about twenty ... cents on the dollar for every dollar of ... insurance premium their getting which is way below the industry for what is the industry average with a sense of that ... yes her regular homeowners policy the insurance company paid out ... sixty five cents on the dollar in claims ... so ... you know I had sort of in excess of thirty one thing you know for every hundred dollars it has in excess of thirty five dollars which is ... the company uses to pay commissions to ... agents who steered the business to them or to whatever our or take profits or invest or whatever and so for these people that if they were being overcharged basically if they were making a claim against his posse they were getting back much less on the dollar and in the typical homeowner was that correct ... there's doubt that well the with a yes and what they're saying is that the insurance company is taking a lot more for itself out then four point four per addressing the problems that may come up with a plan to get the sense to me this is how big this is in scope how many insurers and how many ... homeowners were talking about Liz well in terms of homeowners I mean I don't know the numbers but I just think about the foreclosure ... issues in this country and you know the mortgage payment problems are talking ... him millions and millions of homeowners I mean ... the the regulator last he is just looking at me you work ... but an a but but for that for the insurer's there are several companies that do it ... and then they're affiliated with ... upward that I'd be can make connections with ... companies better insurance units of banks like ... B of A cheese all these these banks have certain ... insurance brokerage unit served reinsurance unit that do business with these ... forced place insurers ... silly ... and ... a lot of that the stem from the dollar is kind of swirling between that and that's what he's uncovers well he's investigating whether there may be some improper ... to improperly high payments kind of ... going back to that we need pitching themselves even even looking to do since since the fall but when it started sparked this latest move today what was for the new information they can on well in in in ... in the investigation some part was the designer of payment ... these relationships the Serco Z ties that ... that could be problematic and and also what he found was you know this ... the estimates that these companies were giving the regulator him for how much sentimentality or paying out was fifty five cents ... went back to county was twenty so that that ... content you're whitening